The European road freight capacity continues on a downward trajectory

The European road freight capacity index decreased for third month in a row, falling by 7.4% year-on-year in March 2024, according to the latest data by Transporeon.

The Capacity Index in February 2024 was 109.52. A reading under 100 indicates a capacity constrained environment. Since November 2022, the Capacity Index has been above 100, indicating that capacity availability has not been a concern. Since March 2023, however, the rate of capacity additions has been progressively decreasing, indicating a decrease in capacity surplus and a normalization of the capacity situation in the European road freight market.

Capacity in March 2024 decreased by 5.1% from the previous month (February 2024) following a 6.1% gain. Easter business and the ongoing Red Sea situation could be the main factors behind this capacity reduction. According to Ti’s most recent survey, there has been a noticeable shift toward multi-modal solutions (air/sea and sea/land combinations), with an overall percentage of over 20%.

In March 2024, the Spot Price Index increased by 5.2% from February 2024 to 121.23, representing an 11.8% year-over-year increase. In contrast, the Contract Price Index increased by 2.3% from the prior year and by 0.9% from the previous month to 124.79 in March 2024. Real volume reduction is indicated by the spot rate index, which is still below the contract rate index (121.23 vs. 124.79). However, the difference between the spot and contract rates has been falling since August 2023, suggesting a more balanced environment from a supply-and-demand perspective.

Moving forward, as seen in February 2024, lack of capacity is not expected due to the weak prospects of the European economy. The weak prospects of the European road freight market are also reflected in LSPs forecasts. DSV reports that, while capacity grew from the previous quarter, year-on-year growth remains at a low level. 

Transporeon’s capacity and freight rate data is available on GSCi – Ti’s online data platform. Supply chain strategists can use GSCi to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry. 

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